As Reported by the Senate Economic Development, Technology 2
and Aerospace Committee 2
123rd General Assembly 5
Regular Session Sub. S. B. No. 265 6
1999-2000 7
SENATORS HORN-HAGAN-SPADA 9
_________________________________________________________________ 11
A B I L L
To amend sections 1724.05, 1724.06, 1726.11, 13
1726.12, 5709.67, and 5709.68 of the Revised Code 14
to modify requirements concerning the Department 15
of Development's annual enterprise zone report, 16
to increase the penalty assessed against 17
municipal corporations and counties that fail to
meet annual enterprise zone agreement reporting 18
requirements from $500 to $5,000, and to transfer 19
the oversight of community improvement 20
corporations and development corporations from
the Director of Development to the Auditor of 21
State.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 23
Section 1. That sections 1724.05, 1724.06, 1726.11, 25
1726.12, 5709.67, and 5709.68 of the Revised Code be amended to 26
read as follows: 27
Sec. 1724.05. Annually, before the thirty-first day of 36
January, each community improvement corporation shall submit a 37
report to the director of development AUDITOR OF STATE. The 38
director AUDITOR OF STATE ALSO, by rule, shall establish 40
guidelines governing the scope and frequency of audits of such 41
THOSE corporations. Each corporation, when required by the 43
director AUDITOR OF STATE, shall submit TO THE AUDITOR OF STATE A 44
REPORT OF an audit by a certified public accountant. The 45
director AUDITOR OF STATE is hereby authorized to receive and 46
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file THOSE annual reports and REPORTS OF THOSE audits. Annual 47
reports shall cover all financial and other transactions of the 49
corporation for the preceding year. Audits AND REPORTS OF THOSE 50
AUDITS shall cover such THE period of time as THAT the director 52
AUDITOR OF STATE specifies. The director AUDITOR OF STATE shall 53
analyze the annual reports and THE REPORTS OF THOSE audits to 54
determine whether or not the activities of the corporation are in 56
accordance with Chapter 1724. of the Revised Code THIS CHAPTER. 57
Sec. 1724.06. If any corporation required by section 66
1724.05 of the Revised Code to submit ANNUAL reports or REPORTS 67
OF audits TO THE AUDITOR OF STATE fails or neglects to make the 69
AN annual report to the director of development as required by 71
law AUDITOR OF STATE for ninety days after the time prescribed by 72
law for making such THAT report, or fails to submit the results 74
REPORT of an audit within ninety days of the date for ITS 75
submission of the audit as specified by the director AUDITOR OF 77
STATE, the director AUDITOR OF STATE shall certify such THAT fact 79
to the secretary of state. The secretary of state THEN shall
thereupon cancel the articles of the corporation by filing and 80
recording the certificate of the director AUDITOR OF STATE or a 81
true copy thereof OF IT. Thereupon all ALL of the rights, 84
privileges, and franchises conferred upon such THE corporation by 86
such THOSE articles of incorporation THEN shall cease. The 88
secretary of state shall immediately notify the corporation of 89
the action taken. Reinstatement may be accomplished within two 90
years after such THAT cancellation upon proper filing of all 92
delinquent ANNUAL reports and REPORTS OF audits to the
satisfaction of the director AUDITOR OF STATE and THE filing his 94
OF THE AUDITOR OF STATE'S certificate thereof REFLECTING THAT 96
SATISFACTION with the secretary of state, who shall be entitled 97
to a fee of ten dollars for recording the same CERTIFICATE in the 99
corporate records. Such THAT filing may be made by any officer, 101
member, creditor, receiver, lessee, or sublessee of the
corporation, and any such person or his agent OF ANY SUCH PERSON 102
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shall be granted access to the books and records of the 103
corporation for such THAT purpose. The rights, privileges, and 105
franchises of a corporation whose articles have been reinstated 106
are subject to section 1702.60 of the Revised Code. 107
Sec. 1726.11. Annually before the thirty-first day of 116
January, a corporation incorporated under Chapter 1726. of the 117
Revised Code THIS CHAPTER shall submit a report to the director 119
of development AUDITOR OF STATE, together with A REPORT OF an 120
audit by a certified public accountant and the director of 121
development. THE AUDITOR OF STATE is hereby authorized to 122
receive and file the same THAT ANNUAL REPORT AND AUDIT REPORT. 123
Such THOSE reports and audits shall cover all financial and other 126
transactions of said THE corporation for the preceding year. 127
Said director of development THE AUDITOR OF STATE shall analyze 128
said THOSE reports and audits to determine whether or not the 130
activities of such corporations THE CORPORATION are in accordance 131
with Chapter 1726. of the Revised Code THIS CHAPTER. 132
Sec. 1726.12. If any corporation required by section 141
1726.11 of the Revised Code TO SUBMIT AN ANNUAL REPORT TOGETHER 142
WITH A REPORT OF AN AUDIT TO THE AUDITOR OF STATE fails or 143
neglects to make SUBMIT the annual report OR THE REPORT OF THE 144
AUDIT to the director of development as required by law AUDITOR 146
OF STATE for ninety days after the time prescribed by law for 148
making such report THEIR SUBMISSION, or if any such report 149
discloses that the corporation has failed to begin business for a 150
period of three years from the effective date of the filing of 151
its articles of incorporation, the director of development 153
AUDITOR OF STATE shall certify such THAT fact to the secretary of 154
state. The secretary of state THEN shall thereupon cancel the 155
articles of the corporation by appropriate entry upon the margin 157
of the record thereof OF THE ARTICLES. Thereupon, all ALL the 158
powers, privileges, and franchises conferred upon such THE 159
corporation by such THOSE articles of incorporation THEN shall 161
cease. The secretary of state shall immediately notify the 163
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corporation of the action taken. 164
Sec. 5709.67. (A) Except as otherwise provided in 173
sections 5709.61 to 5709.69 of the Revised Code, the director of 174
development shall administer those sections and shall adopt such 175
rules as are necessary to ensure that no zone is certified or 176
remains certified unless it meets any applicable requirements of 177
division (A) of section 5709.61 of the Revised Code, and to 178
determine the number of positions attributable to an enterprise 179
for the purposes of division (A)(3) of section 5709.64 of the 180
Revised Code. The director shall assign to each zone currently 181
certified a unique designation by which the zone shall be 182
identified for purposes of administering sections 5709.61 to 183
5709.69 of the Revised Code. The tax commissioner shall 184
administer all other tax incentives provided under sections 185
5709.61 to 5709.69 of the Revised Code and shall adopt such rules 186
as are necessary to carry out that duty. No tax incentive 187
qualification certificate or employee tax credit certificate 188
shall be issued or remain in effect unless the enterprise 189
applying for or holding the certificate complies with all such 190
rules. The director of job and family services shall administer 192
the incentive provided under division (B)(1) of section 5709.66 193
of the Revised Code and shall adopt such rules as are necessary 194
to carry out that duty. No extension of benefits certificate 195
shall be issued or remain in effect unless the enterprise 196
applying for or holding the certificate complies with all such 197
rules.
(B) Annually NOT LATER THAN THE FIRST DAY OF AUGUST EACH 199
YEAR, the director of development shall report to the general 201
assembly the ON ALL OF THE FOLLOWING FOR THE PRECEDING CALENDAR 202
YEAR:
(1) THE cost to the state of the tax and other incentives 205
provided under sections 5709.61 to 5709.69 of the Revised Code, 206
the;
(2) THE number of tax incentive qualification 208
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certificates, employee tax credit certificates, and extension of 209
benefits certificates issued, the; 210
(3) THE names of the municipal corporations and counties 213
that have entered agreements under sections 5709.62, 5709.63, and 214
5709.632 of the Revised Code, and the; 215
(4) THE number of new employees hired as a result of the 217
tax and other incentives provided under sections 5709.61 to 218
5709.69 of the Revised Code; 219
(5) INFORMATION ON AGREEMENT TERMS CONCERNING SCHOOL 221
DISTRICT REVENUE THAT ARE NOT PROVIDED FOR IN SECTION 5709.631 OF 222
THE REVISED CODE AND THAT ARE FORWARDED TO THE DIRECTOR UNDER 225
DIVISION (H) OF SECTION 5709.62, DIVISION (H) OF SECTION 5709.63, 226
OR DIVISION (G) OF SECTION 5709.632 OF THE REVISED CODE. The 228
THE report shall include a finding by the director as to 231
whether the incentives provided under sections 5709.61 to 5709.69 232
of the Revised Code have resulted in the creation of more 233
positions in the state than would have been created without the 234
incentives. THE DIRECTOR SHALL SEND A COPY OF THE REPORT TO EACH 235
MEMBER OF THE GENERAL ASSEMBLY AND TO THE DIRECTOR OF THE 236
LEGISLATIVE SERVICE COMMISSION. 237
(C) All forms used in connection with the administration 239
of sections 5709.61 to 5709.69 of the Revised Code, except forms 240
administered directly by the tax commissioner, by the director of 242
job and family services, or by a county or municipal corporation, 244
are subject to review and approval by the state forms management 245
control center under sections 125.91 to 125.98 of the Revised 246
Code.
Sec. 5709.68. (A) On or before the thirty-first day of 255
March each year, a municipal corporation or county that has 256
entered into an agreement with an enterprise under section 257
5709.62, 5709.63, or 5709.632 of the Revised Code shall submit to 258
the director of development and the board of education of each 259
school district of which a municipal corporation or township to 260
which such an agreement applies is a part a report on all such OF 261
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THOSE agreements in effect during the preceding calendar year. 263
The report shall include ALL OF the FOLLOWING information 264
described in divisions (A)(1) to (7) of this section.: 266
(1) The designation, assigned by the director of 268
development, of each urban jobs and enterprise zone within the 269
municipal corporation or county, the date each zone was 270
certified, the name of each municipal corporation or township 271
within each zone, and the total population of each zone according 272
to the most recent data available.; 273
(2) The number of enterprises that are subject to such 275
THOSE agreements and the number of full-time employees subject to 276
those agreements within each zone, each according to the most 277
recent data available and identified and categorized by the 278
appropriate standard industrial code, and the rate of 279
unemployment in the municipal corporation or county in which the 280
zone is located for each year since each zone was certified.; 281
(3) The number of agreements approved and executed during 283
the calendar year for which the report is submitted, the total 284
number of agreements in effect on the thirty-first day of 285
December of the preceding calendar year, the number of agreements 286
that expired during the calendar year for which the report is 287
submitted, and the number of agreements scheduled to expire 288
during the calendar year in which the report is submitted. For 289
each agreement that expired during the calendar year for which 290
the report is submitted, the municipal corporation or county 291
shall include the amount of taxes exempted and the estimated 292
dollar value of any other incentives provided under the 293
agreement. 294
(4) The number of agreements receiving compliance reviews 296
by the tax incentive review council in the municipal corporation 297
or county during the calendar year for which the report is 298
submitted, including all of the following information: 299
(a) The number of agreements the terms of which an 301
enterprise has complied with, indicating separately for each such 302
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agreement the value of the real and personal property exempted 303
pursuant to the agreement and a comparison of the stipulated and 304
actual schedules for hiring new employees, for retaining existing 305
employees, for the amount of payroll of the enterprise 306
attributable to these employees, and for investing in 307
establishing, expanding, renovating, or occupying a facility; 308
(b) The number of agreements the terms of which an 310
enterprise has failed to comply with, indicating separately for 311
each such agreement the value of the real and personal property 312
exempted pursuant to the agreement and a comparison of the 313
stipulated and actual schedules for hiring new employees, for 314
retaining existing employees, for the amount of payroll of the 315
enterprise attributable to these employees, and for investing in 316
establishing, expanding, renovating, or occupying a facility; 317
(c) The number of agreements about which the tax incentive 319
review council made recommendations to the legislative authority 320
of the municipal corporation or county, and the number of such 321
THOSE recommendations that have not been followed; 323
(d) The number of agreements rescinded during the calendar 325
year for which the report is submitted. 326
(5) The number of enterprises that are subject to 328
agreements that expanded within each zone, including the number 329
of new employees hired and existing employees retained by each 330
such enterprise, and the number of new enterprises that are 331
subject to agreements and that established within each zone, 332
including the number of new employees hired by each such 333
enterprise.; 334
(6)(a) The number of enterprises that are subject to 336
agreements and that closed or reduced employment at any place of 337
business within the state for the primary purpose of 338
establishing, expanding, renovating, or occupying a facility, 339
indicating separately for each such enterprise the political 340
subdivision in which the enterprise closed or reduced employment 341
at a place of business and the number of full-time employees 342
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transferred and retained by each such place of business.; 343
(b) The number of enterprises that are subject to 345
agreements and that closed or reduced employment at any place of 346
business outside the state for the primary purpose of 347
establishing, expanding, renovating, or occupying a facility. 348
(7) For each agreement in effect during any part of the 350
preceding year, the number of employees employed by the 351
enterprise at the project site immediately prior to formal 352
approval of the agreement, the number of employees employed by 353
the enterprise at the project site on the thirty-first day of 354
December of the preceding year, the payroll of the enterprise for 355
the preceding year, the amount of taxes paid on tangible personal 356
property situated at the project site and the amount of such 357
THOSE taxes that were not paid because of the exemption granted 359
under the agreement, and the amount of taxes paid on real 360
property constituting the project site and the amount of such 361
THOSE taxes that were not paid because of the exemption granted 363
under the agreement. If an agreement was entered into under 364
section 5709.632 of the Revised Code with an enterprise described 365
in division (B)(2) of that section, the report shall include the 366
number of employee positions at all of the enterprise's locations 367
in this state. If an agreement is conditioned on a waiver issued 368
under division (B) of section 5709.633 of the Revised Code on the 369
basis of the circumstance described in division (B)(3)(a) or (b) 370
of that section, the report shall include the number of employees 371
at the facilities referred to in division (B)(3)(a)(i) or (b)(i) 372
of that section, respectively. 373
(B) Upon the failure of a municipal corporation or county 375
to comply with division (A) of this section: 376
(1) Beginning on the first day of April of the calendar 378
year in which the municipal corporation or county fails to comply 379
with that division, the municipal corporation or county shall not 380
enter into any agreements with an enterprise under section 381
5709.62, 5709.63, or 5709.632 of the Revised Code until the 382
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municipal corporation or county has complied with division (A) of 383
this section. 384
(2) On the first day of each ensuing calendar month until 386
the municipal corporation or county complies with that division 387
(A) OF THIS SECTION, the director of development shall either 389
order the proper county auditor to deduct from the next 390
succeeding payment of taxes to the municipal corporation or 391
county under section 321.31, 321.32, 321.33, or 321.34 of the 392
Revised Code an amount equal to five hundred THOUSAND dollars for 393
each calendar month the municipal corporation or county fails to 395
comply with that division, or order the county auditor to deduct 396
such an THAT amount from the next succeeding payment to the 398
municipal corporation or county from the undivided local
government fund under section 5747.51 of the Revised Code. At 399
the time such a payment is made, the county auditor shall comply 400
with the director's order by issuing a warrant, drawn on the fund 401
from which such THE money would have been paid, to the director 403
of development, who shall deposit the warrant into the state 404
urban jobs and enterprise zone program administration fund 405
created in division (C) of this section. 406
(C) The director, by rule, shall establish the state's 408
application fee for applications submitted to a municipal 409
corporation or county to enter into an agreement under section 410
5709.62, 5709.63, or 5709.632 of the Revised Code. In 411
establishing the amount of the fee, the director shall consider 412
the state's cost of administering the enterprise zone program, 413
including the cost of reviewing the reports required under 414
division (A) of this section. The director may change the amount 415
of the fee at such THE times and in such THE increments as he 417
deems THE DIRECTOR CONSIDERS necessary. Any municipal 418
corporation or county that receives an application shall collect 419
the application fee and remit the fee for deposit in the state 420
treasury to the credit of the state enterprise zone program 421
administration fund, which is hereby created. Money credited to 422
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the fund shall be used by the department of development to pay 423
the costs of administering the enterprise zone program, including 424
the cost of reviewing the reports required under division (A) of 425
this section.
(D) On or before the thirtieth day of June each year, the 427
director of development shall certify to the tax commissioner the 428
information described under division (A)(7) of this section, 429
derived from the reports submitted to the director under this 430
section. 431
On the basis of the information certified under this 433
division, the tax commissioner annually shall submit a report to 434
the governor, the speaker of the house of representatives, the 435
president of the senate, and the chairpersons of the ways and 436
means committees of the respective houses of the general 437
assembly, indicating for each enterprise zone the amount of state 438
and local taxes that were not required to be paid because of 439
exemptions granted under agreements entered into under section 440
5709.62, 5709.63, or 5709.632 of the Revised Code and the amount 441
of additional taxes paid from the payroll of new employees. 442
Section 2. That existing sections 1724.05, 1724.06, 444
1726.11, 1726.12, 5709.67, and 5709.68 of the Revised Code are 445
hereby repealed. 446